Zillow Group Z reported its first-quarter 2025 adjusted earnings per share (EPS) of 41 cents, which missed the Zacks Consensus Estimate of 43 cents. However, the figure increased 13.9% on a year-over-year basis.

Results reflected higher for-sale revenues and rental revenues year over year. However, increased sales and marketing expenses and the cost of revenues undermined the results to some extent.

Total revenues of $598 million surpassed the Zacks Consensus Estimate of $588.6 million. The figure improved 13% year over year.

Per Jeremy Wacksman, CEO of Zillow Group, “As we expand our services and scale the housing super app across more markets, we are bringing more customers and real estate professionals together and making buying, selling, and renting easier for them, which is helping us grow both our revenue and profits.”

Zillow Group’s Quarter in Detail

For-sale revenues reported during the first quarter were higher by 8% at $458 million. Residential revenues at $417 million increased 6.1% year over year, aided by growth in the company’s premier agent offerings, Zillow Showcase, new construction and Follow Up Boss. Mortgage revenues were 32.3% higher year over year at $41 million, backed by a 32% increment in purchase loan origination volume to $791 million.

Rental revenues grew 33% year over year to $129 million, led by multifamily revenue growth of 47% year over year in the first quarter.

Adjusted EBITDA margin improved by 200 basis points to 26% of revenues at $153 million, led by growth in revenues across the business and cost discipline.

Online traffic on Zillow Group’s mobile applications and sites was higher by 5% year over year to 227 million average monthly unique users. Visits improved 2% year over year to 2.4 billion.

However, sales and marketing expenses increased 19.3% year over year to $198 million due to higher investments in personnel and marketing and advertising costs. The cost of revenues grew 13% year over year to $139 million due to an increase in amortization of website development costs, driven by new product releases, as well as an increase in lead acquisition costs related to strategic partnerships.

Balance Sheet of Zillow Group

Zillow exited the first quarter of 2025 with $1.6 billion in cash and investments, down from $1.9 billion at the prior quarter's end.

Z’s 2025 Outlook

Zillow expects its second-quarter 2025 total revenues to be in the range of $635-650 million and its adjusted EBITDA between $140 and 155 million.

Second-quarter for-sale revenues are expected to improve in the mid-single digits year over year, driven by residential revenue growth of low to mid-single digits and mortgage revenue growth of nearly 30%. Rental revenues are expected to increase by more than 35% year over year as the company is likely to reap the benefits of building its two-sided marketplace and from the Redfin rentals partnership in April. Multifamily rental revenues are expected to grow better than overall rental revenues, driven by continuous property growth.

Story Continues

The company expects an increase in adjusted EBITDA expenses in the second quarter due to seasonal marketing and lead costs relating to the Redfin rentals partnership.

For 2025, management expects mid-teens revenue growth, with adjusted EBITDA margin expansion. The company expects its rental revenues to grow by around 40% year over year.

Z’s Zacks Rank

Zillow Group currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zillow Group, Inc. Price, Consensus and EPS SurpriseZillow Group, Inc. Price, Consensus and EPS Surprise

Zillow Group, Inc. price-consensus-eps-surprise-chart | Zillow Group, Inc. Quote

Performance of Other Broader Real Estate Market Stocks

CBRE Group Inc. CBRE reported first-quarter 2025 core EPS of 86 cents, ahead of the Zacks Consensus Estimate of 81 cents. The reported figure also increased 10.3% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Results reflected year-over-year revenue growth across all its business segments. CBRE’s resilient businesses generated net revenue growth of 17%, nearly matching the 18% increase in its transactional businesses.

Iron Mountain Incorporated IRM reported first-quarter adjusted funds from operations (AFFO) per share of $1.17, beating the Zacks Consensus Estimate of $1.16. This figure jumped 6.4% year over year.

IRM’s results reflected solid performances across all segments, including the storage, service, global RIM and data center business. However, higher interest expenses in the quarter undermined the performance to an extent.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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